Argo's founders are CEO Bryan Salesky, formerly the director of hardware development for internet technology provider Google’s self-driving car initiative, and chief operating officer Peter Rander, who was until September 2016 lead engineer for Uber’s Advanced Technologies Center, helping the ride ordering company work on its own autonomous car technology.

The company plans to scale operations to the point where it will have about 200 employees spread between its Pittsburgh headquarters and engineering hubs in Michigan and the Bay Area in California by the end of this year.

The funding will be provided as part of a deal whereby the startup will develop the virtual driver system that will be used in Ford’s first autonomous vehicle, which it plans to launch commercially in 2021. The technology would feasibly also be licensed to other carmakers.

Ford’s investment will make it majority shareholder in Argo but despite that, Argo will be given the freedom to function with “substantial independence,” the companies said. Argo’s robotics expertise will be combined with Ford’s internal efforts to work on the virtual driver system, which will utilise machine learning to enable driverless vehicles to operate safely and intelligently.

Mark Fields, president and chief executive of Ford, said: “The next decade will be defined by the automation of the automobile, and autonomous vehicles will have as significant an impact on society as Ford’s moving assembly line did 100 years ago.

“As Ford expands to be an auto and a mobility company, we believe that investing in Argo AI will create significant value for our shareholders by strengthening Ford’s leadership in bringing self-driving vehicles to market in the near term and by creating technology that could be licensed to others in the future.”

Salesky added: “We are energised by Ford’s commitment and vision for the future of mobility, and we believe this partnership will enable self-driving cars to be commercialised and deployed at scale to extend affordable mobility to all.”

The deal is not Ford’s first big strategic bet on software over the past year. It provided $182m for the $653m round closed by software technology and services provider Pivotal Software in May 2016, before contributing to a $6.6m seed round for 3D mapping startup Civil Maps in July and combining with internet group Baidu to invest $150m in another 3D mapping technology developer, Veldoyne Lidar, the following month.

Ford has also teamed with accelerator operator Techstars for a scheme called Techstars Mobility, Driven by Detroit, which will fund and assist mobility technology startups at the pre-seed stage.. It will inves up to $120,000 a time in companies that can support the Ford Smart Mobility plan, which was drawn up as a roadmap to help the automaker navigate the transition to a new model of global mobility.

Ford is not the first automotive company to take the corporate venturing path but it does appear to have moved into a position where it is spending more than many rivals on strategic investments, particularly in the software space.

The approach is interesting because it represents Ford largely going its own way, as opposed to the large-scale partnerships formed by BMW and Intel, Volvo and Apple, or Daimler and Uber, but through a determined effort to make use of open innovation. It is harnessing the expertise of startups which have the means to generally operate independently.

The move is perhaps risky as Ford does not have the means to exercise direct control over what is still nascent technology, but the idea is not precisely new.

If anything, it is reminiscent of the Google route to development: make large acquisitions, and VC investments (through its Google Ventures and Capital units) and simultaneously develop its own internal units, though we do not know if Ford’s stake in Argo is comparable to that of Google parent Alphabet in, say, Niantic.

The larger question is perhaps whether, if more large businesses start to follow that kind of wide-ranging open innovation model, it could prove an easy route for entrepreneurs without the patience to necessarily go the traditional seed/series A route. If so, the corporate venturing space may look somewhat different two or three years from now.

Copyright Mawsonia Limited 2010. Please don´t cut articles from www.globalcorporateventuring.com or the PDF and redistribute by email or post to the web without written permission.